Japanese Prime Minister and leader of the ruling Liberal Democratic Party, Shinzo Abe points a reporter for questions during a press conference in Tokyo, Monday, Dec. 15, 2014. AP
TOKYO, Japan – Prime Minister Shinzo Abe on Tuesday stepped up pressure on business leaders to hike wages as he embarked on a renewed push to reinvigorate Japan’s economy after his weekend election triumph.
Stagnant salaries are one of the main missing links in the “virtuous circle” of growth that the premier’s signature “Abenomics” plan envisages.
While prices in deflation-plagued Japan have finally begun to rise, take-home pay — especially when measured by spending power — has shown itself stubbornly resistant.
That has left many people worse off. Complaints over the uneven effects of Abenomics were a common refrain in the run up to Sunday’s poll, in which Abe’s ruling coalition trounced the opposition.
His meeting Tuesday with Sadayuki Sakakibara, head of the influential Japan Business Federation, and other business executives, as well as representatives of labor unions, was a key piece of symbolism.
“I would like you to continue wage increases next year and the year after next so that the impact of Abenomics can spread all over the country,” Abe told the meeting.
Participants adopted a statement urging “the business circle to make its utmost effort toward a wage increase,” officials from the prime minister’s office said.
The gathering was the first significant action since Abe’s Liberal Democratic Party-led coalition swept the ballot on Sunday, winning a two-thirds majority in the lower house election.
Abe, 60, had billed the election as a referendum on Abenomics, and pledged to continue his focus on the economy, which he said would remain his “top priority”.
Abenomics — a blend of money printing, government spending and economic reforms — has sent the yen sharply lower and boosted stocks.
But the failure to implement some of the tough changes economists say are needed — re-imagining the labor market and tackling an inefficient agricultural sector — has left the premier open to charges of style over substance.
Companies whose bottom lines have been fattened by the plunging currency and others who are sitting on huge piles of cash have been reluctant to boost pay.
Commentators say executives are wary of lumbering themselves with higher wage bills after a number of false dawns in the last two decades of economic lassitude.
Many are waiting to see if Abe’s promised recovery will really take root.
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